Global Biz

IPad 2 hits overseas stores after US sellout

(Agencies)
Updated: 2011-03-25 14:18

WELLINGTON/SYDNEY - Hundreds of customers lined up outside Apple stores in Australia and New Zealand on Friday for the international launch of the iPad 2, which has flown off the shelves in the United States leaving the company struggling to meet demand.

Customers stand in line outside Apple's flagship 5th Avenue store to purchase iPad 2 tablets in New York, March 16, 2011. [Photo/Agencies]

Analysts forecast some 1 million devices may have been sold in the first weekend of the launch in the United States, but many warn that it's not clear how supply constraints will affect availability following the Japan earthquake and tsunami.

The iPad 2, a thinner and faster version that features two cameras for video chat, was introduced in the United States on March 11. But some would-be buyers have expressed frustration at how difficult it has been to secure one of the wildly popular tablet computers, sparking speculation Apple misjudged demand.

Related readings:  Apple to sell iPad 2 in HK in April  Apple's Jobs introduces iPad 2  Jobs breaks from medical leave to unveil iPad 2

It went on sale in New Zealand at 0400 GMT. One store in Wellington was allocated just 12 of the gadgets and they were snapped up in a matter of minutes.

Sales kick off in Australia at 0600 GMT and then roll out to other countries including France, the United Kingdom, Canada, Denmark, Germany, Italy, Mexico, Netherlands, and Spain.

"If it wasn't for the iPad, I wouldn't be in Australia right now," said Alex Lee, a backpacker from Canada, who was the first in the queue outside the glass-fronted Apple store in Sydney's central business district. He said he diverted his travels from Singapore to attend the launch.

"It's like a habit. I've also lined up on Regent Street in London for the iPhone", added Lee, who had a folding chair and blanket and had spent two nights waiting.

Apple staff in Sydney, dressed in the company's blue branded shirts ,handed out trays of sandwiches to those in the queue, some of whom had bedded down on blankets overnight before being awoken by bright sunshine.

Its retail price in Australia starts at A$579 ($568), against $499 in the United States. The iPad 1 started selling in Australia from A$629 when it was launched.

In Wellington, staff at electronics retailer JB HiFi said they had only received about a dozen iPad 2s and they were snapped up in about 10 minutes. A sales assistant said the store did know when the next delivery would come in.

Apple Inc CEO Steve Jobs introduces the iPad 2 on stage during an Apple event in San Francisco March 2, 2011. [Photo/Xinhua]

The first iPad, which went on sale a year ago, sold 500,000 units in the first week and crossed the 1 million unit mark in 28 days. Nearly 15 million iPads were sold in nine months of 2010, two or three times as many as analysts had predicted. 

Apple Chief Executive Steve Jobs said on Tuesday the company was "working hard to build enough iPads for everyone."

Fiona Martin, a spokeswoman for Apple in Australia, declined to comment on whether there was enough stock to meet demand.

"We don't comment on speculation, we've got plenty down there for all those folk that are in the queue."

A prospective buyer in Wellington, 22-year-old student Ian MacDonald, said he had held off buying the first generation iPad because it lacked a camera and he wanted any bugs ironed out.

"This version looks way better, with the cameras and it beats all the other tablets because there are so many apps (applications)," he said.

Myles Jihme, a student from Malaysia, waiting outside the Apple store in Sydney said he intended to buy two iPads, the maximum allowed by Apple, and would auction one for charity. "All the profits from the sale will go to Japan's disaster fund," he said.

In addition to Friday's roll out, the iPad 2 will be available in China's Hong Kong, South Korea, Singapore and other regions and countries in April.

Apple now faces increased competition from rivals. Samsung Electronics and Motorola have tablets on the market and Blackberry-maker Research In Motion and Hewlett-Packard Co are set to release tablets in coming months.

Japan supply woes

Analysts are also concerned that Apple will face shortages of key components for the iPad 2 because of the earthquake and tsunami that struck Japan two weeks ago.

Several key components in the new version of Apple's popular iPad come from Japan, including the battery and the flash memory used to store music and video on the device, according to IT research house iSuppli .

Apple delayed sales of the iPad 2 in Japan, but has said that had nothing to do with any component shortages.

Analysts say it's too early to gauge the extent of component supply shortages, while the wait time on delivery of online orders has shortened to 3-4 weeks in recent days from as high as 6-7 weeks, suggesting component shortages have not reached critical levels.

"The quake will have an effect on supplies of the iPad, since some parts come from Japan," said Akira Minamikawa, Vice President at iSuppli in Tokyo.

"It's too early to say how far production will be affected. But there are a number of iPad parts manufacturers, including Toshiba and Hitachi for LCD panels, while Toshiba also makes flash memory."

In Taiwan, the CFO of TPK Holdings , a major supplier of touch screens to companies that include Apple, said it has had no problems with supplies because it has many secondary sources outside of Japan.

Hon Hai Precision Industry Co, a contract manufacturer and subsidiary of Foxconn that is heavily reliant on Apple's business, said it does not expect supply problems in the near-term.

Most of the Japanese factories that are thought to supply Apple with parts are situated well away from the earthquake-hit area, still distribution of supplies is expected to be hit by nationwide fuel shortages.

Apple's clout in the supply chain means investors remain confident -- for now -- that it enjoys priority and can secure critical components ahead of competing manufacturers.

Still, Apple is unlikely to avoid a hit from the disruption in Japan, analysts said. 

"We think the disruption especially for chemical materials could continue throughout Q2 and when the components become absent, it's inevitable that Apple would be affected," said Calvin Huang, an analyst at Daiwa in Hong Kong.

"Then we will see a situation that customers will have to wait for months for an iPad to arrive after placing an order."